Company A will be reducing its annual dividend by 4.0% a year for the next 2 years. After that, it will pay a dividend of $.95 a share, growing each year thereafter by 3.0%. This dividend stream with 3.0% growth per year is expected to last for 50 years (until the end of year 52), at which point each share can be exchanged for $26.00. The company recently paid a dividend of $1.33 per share. What is this stock worth given a 8.0% required rate of return? The stock is worth $17.48. The stock is worth $18.02. The stock is worth $16.63. The stock is worth $23.75.
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- Rearden Metals expects to have earnings this coming year of $2.50 per share. Rearden plans to retain all of its earnings for the next year. For the subsequent three years, the firm will retain 50% of its earnings. It will then retain 25% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 25% per year. Any earnings that are not retained will be paid out as dividends. Assume Rearden's shares outstanding remains constant and all earnings growth comes from the investment of retained earnings. If Rearden's equity cost of capital is 8%, then what is Rearden's stock price?The Merriweather Co. just announced that it will pay a dividend next year of $1.60. The company will then increase its dividend by 10 percent per year for two years after which it will maintain a constant 2 percent dividend growth rate. What is one share worth today at a required rate of return of 14 percent?Stewart Industries expects to pay a $3.00 per share dividend on its common stock at the end of the year (i.e. D1 = $3.00). The dividend is expected to grow 25 percent a year until t = 3, after which time the dividend is expected to grow at a constant rate of 5 percent a year (i.e. D3 = $4.6875 and D4 = $4.9219). The stock’s beta is 1.2, the risk-free rate of interest is 6 percent, and the market risk premium (i.e., rm –rrf) is 5 percent. What is the company’s current stock price?
- News Corp is expected to pay a dividend of $0.8 in one year. The dividend is expected to grow at 12% in the following 3 years and then at a constant rate of 4% per annum indefinitely. If the required rate of return is 12%, what is the price of the company's share today? Please illustrate your answer using a timeline.Halliford Corporation expects to have earnings this coming year of $2.765 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 51% of its earnings. It will retain 17% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 22.1% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 9.2%, what price would you estimate for Halliford stock? The stock price will be $ (Round to the nearest cent.)Gee Gee is going to pay an annual dividend of $2.05 a share per year. This year, the company paid a dividend of $2 a share. The company adheres to a constant rate of growth divi policy. What will one share of this common st be worth six years from now if the applicable discount rate is 11.2 percent?
- Halliford Corporation expects to have earnings this coming year of $3.26 per share. Halliford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 50% its earnings. It will retain 17% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 22.8% per year. Any earnings that are not retained w be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 10.6%, what price would you estimate for Halliford stock? The stock price will be $ (Round to the nearest cent.)Maxwell Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.89 a share. The following dividends will be $.99 and $1.57 a share annually for the following two years, respectively. After that, dividends are projected to increase by 4.5 percent per year. How much are you willing to pay today to buy one share of this stock if your desired rate of return is 12 percent? O $18.27 O $17.65 O $21.89 O $24.11Halliford Corporation expects to have earnings this coming year of $3.18 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 50% of its earnings. It will then retain 17% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 21.81% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 8.3%, what price would you estimate for Halliford stock? Note: Remenber that growth rate is computed as: retention rate×rate of return.
- Halliford Corporation expects to have earnings this coming year of $2.94 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 53% of its earnings. It will then retain 17% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 24.43% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 8.4%, what price would you estimate for Halliford stock? Note: Remenber that growth rate is computed as: retention rate x rate of return.Halliford Corporation expects to have earnings this coming year of $2.73 per share. Halliford plans to retain all of its earnings for the next two years. For the subsequent two years, the firm will retain 54% of its earnings. It will then retain 23% of its earnings from that point onward. Each year, retained earnings will be invested in new projects with an expected return of 27.00% per year. Any earnings that are not retained will be paid out as dividends. Assume Halliford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Halliford's equity cost of capital is 11.1%, what price would you estimate for Halliford stock? Note: Remenber that growth rate is computed as: retention rate × rate of return. The current price per share is $ (Round to the nearest cent.)